Finally, when tax revenues from the rich begin to decline, Congress begins to look for other sources of revenue to tap into because they have spent the money before the first dollar of new taxes comes in. And there will never be a discussion about cutting programs, rolling back benefits, or slowing spending, especially with Democrats in control of both houses of Congress. The result is that when the rich begin to shift their income to reduce their tax liability and tax revenues begin to slow, Congress must go back to the tax base of last resort — the middle class. Then the tax increases won’t be so stealthy.

Before believing Obama’s campaign ads promising you how he and the Democrat-controlled Congress only want to tax the rich, remember that earlier this year Democrats — including Obama and Biden — were pushing a budget proposal that would have increased taxes for individuals making $31,850 and couples making $63,700 — hardly the rich.

With that in mind, do you really trust Obama and his Democratic pals in Congress when they say that they have honestly given up on tax increases for the middle class? And let us not forget that Obama has stated repeatedly during the campaign that he intends to raise the capital gains tax, which sounds like something that will only affect the rich until you want to sell your house.

Meanwhile, the Bush tax cuts have saved middle-class families nearly $2,000 annually — tax cuts that McCain-Palin supports extending, but Obama-Biden intends to roll back in 2010 if they are elected.

We only need to look at the last Democrat elected to the presidency as a cautionary tale about believing their trickle-up tax promises. Bill Clinton also promised middle-class voters that he would cut taxes, and in fact he won the 1992 election by chastising President George H.W. Bush for violation of his “no new taxes” pledge. Once safely in office, however, Clinton passed the largest tax increase in the history of mankind (the deciding vote in the Senate cast by Vice President Al Gore, supported by Joe Biden) and began hiking gas taxes (a tax increase that not a single Republican in Congress voted for). And to make it even worse, Clinton imposed his tax increases retroactively, hitting middle-class families even harder.

In the end, no one escapes tax increases. But when it comes to tax increases targeted at the rich, invariably the middle class and the poor end up holding the bag. Another Harvard man, President John Kennedy, understood this and enacted tax cuts which spurred economic growth and increased tax revenues. “A rising tide lifts all boats,” Kennedy repeatedly said. However, this is heresy for the Democratic Party today.

Obama’s trickle-up tax increases are a fairy tale that can only be told before the election. Once elected as president, Obama will have to quickly break the bad news to the American people that he was only kidding about his gravity-defying tax increases only on the rich. This is especially true after the bailout announcements this past week (Fannie Mae, Freddie Mac, AIG, and no doubt more coming taxpayers’ way). And those tax cuts he is currently promising middle-class voters in battleground states, like Ohio, Pennsylvania, Michigan, and Iowa? Well, you can expect your tax rebate check from his new Treasury secretary, Bigfoot.

45 Comments, 45 Threads

My wife is from Europe and, when she read this article, she responded that the “eat-the-rich” Obamanomics described here is exactly the socialist policies as prcaticed in Western Europe today: Force the “middle class” to carry the burden of the poorest and, to a degree, of the richest as well.

The “rich” can afford to pay more…so they wiggle a bit of their cash here and there to offset things, but they keep on keepin’ on. The poor don’t pay anyway, and they’re well beyond EXPECTING their way to be paid for. It is YOU AND I – the “middle class” – who pay and pay from our otherwise-apportioned-for Regular-gas-and-Wheaties budgets.

The author writes:“For any increased taxes that the rich do end up paying, they pass those off to the middle class who are their employees (through pay cuts and layoffs) and customers (through price increases). Thus, tax increases on the rich actually result in stealth tax increases and layoffs that land squarely on the middle class and the poor. Do you have anyone to pass your tax increases off to? Didn’t think so. And when prices of everyday goods begin to increase, the result is inflation, meaning that the money you have today is worth less tomorrow. For high inflation and high unemployment, think Jimmy Carter.”

“Finally, when tax revenues from the rich begin to decline, Congress begins to look for other sources of revenue to tap into because they have spent the money before the first dollar of new taxes comes in. And there will never be a discussion about cutting programs, rolling back benefits, or slowing spending, especially with Democrats in control of both houses of Congress. The result is that when the rich begin to shift their income to reduce their tax liability and tax revenues begin to slow, Congress must go back to the tax base of last resort — the middle class. Then the tax increases won’t be so stealthy.“

You are forgetting the upcoming tax increases for Social Security and Medicare to pay for the baby-boomers’ retirement (about 7% of gross wages) and the proposed national sales tax on carbon (called “cap and trade”). These two new taxes could reach 10% or $5,000 for a $50,000 income family. The income tax discussion in this election cycle is a smoke screen to hide what is really about to hit taxpayers.

The rich also can afford to hire accountants that actually understand the thick book of tax laws the IRS has. These accountants tell them where to put their income to be taxed the least.

If you are truly very wealthy, say with a dividend paying estate of 10 Million or more, you will not be affected. Imagine if I have 10M invested in bonds or stocks that pay me 5%. I make 500K a year, and currently pay 15% on it. Under Obama, my taxes go up 5%. Hence, I am wealthy enough to be a Democrat.

It’s the working “rich” that Obama targets. He conveniently forgets that they routinely work 10-14 hour days, assume a lot of risk, and in many cases are not working for “the Man”, but run their own small businesses. Their income is not guaranteed.

With all of Obama’s talk about a Depression, I think that he really wants one to happen. At least his fiscal and anti-free trade policy looks like it could bring about one.

You’ll see quite a few well off people simply stop working, especially those living in high tax states like California or New York. Why work hard when you don’t even get to keep half of what you make? Not only will this add to the middle class tax burden, it prevents them from improving their lot. Rich people can move their money around to investments with lower tax rates. This whole thing is a hoax.

As Milton Friedman said to Ted Kennedy in a congressional hearing “Socialism hasn’t worked in 6,000 years”. Ted Kennedy responded “That’s because I wasn’t running it”.

Why no one discusses ‘Hauser’s Law’? No matter what the tax rate is the Fed only collects 20% of the GNP. The US government needs to ‘budget’ at that level.
Sending more money to Congress is like giving an alcoholic a drink.
Right now we have record tax revenues but unfortunately the spending has outdone that.
The taxpayers need to inform Congress that they know the ‘score’. The tax code provides relief and they intend to take it!
Boston Tea Party II

Sorry, it looks like supply-side economics, trickledown from tax cuts for the rich will die a well deserved death when Bush II swaggers off in his clueless way to retirement in Cuidad del Crawford.

We just got slapped with the reality that most of the American people will pay dearly in taxes on new trillions in debt for the follies of the rich on Wall Street and Ruling Elite regulators in NYC and DC. And found out that even if they were not part of the real estate speculation bubble and were fiscally prudent in their own mortgages, they will be the ones that not only pay in taxes for the the assholes golden parachutes – but pay in significant loss in their home value and credit access/rates because of those screwups – excess built house capacity and bad paper – now to be carried as a debt generations will have to make good on.

Then further fume as they realize that many of America’s best capital assets will be plundered on purchase for pennies on the dollar by nations that had better stewardship of their financial systems than we did – nations like Russia, Japan, Germany, China, Korea, Saudi Arabia.

The voters will be looking for heads to roll.

And unfortunately for McCain, most of the public believes it was set in motion by laissez faire “let the genius of the free markets speech and unleash Wall Street from Gov’t Regulation!!” , Republicans. It hardly helps that the author of much of the brainless deregulation is his “long-time dear, dear friend from 20 years in the Senate”…his economic advisor, Phil Gramm.

Bye, bye trickledown, so long tax cuts for the rich, and “deficits don’t matter” Bushies. As for the idea that the rich will always duck taxes – I don’t think so if a country desperate for revenue wipes out their deductions, loopholes, and estate tax eradication scheme.

I am one disgusted Republican. We lost our best candidate, Romney, because the Republican Party is in the hands of Fundie whack jobs that distrusted his religious faith. And who would have ensured Bobby Jindal, with dark skin and a Catholic faith…would never get the Fundie Presidential seal of approval.

Not that Obama is any better. He’s a slick con artist, IMO. But voter perception is that he is less “captured” than McCain by DC interests and retaining the good will of his “dear, longtime Senate friends”.

To more democratically redistribute wealth and power, why not end income taxes and substitute consumption taxes, in the form of (1) a progressive tax on each individual’s annual consumption and (2) a sales tax on all retail sales, with rates depending upon the deemed social value of the product?

Would not consumption taxes better strike their intended targets and better address re-apportionments of consuming power?

If you do nothing and let the rich get richer, will they pass the profit on to their employees with raises? I don’t think so. They will pocket their extra money and smile all the way to the bank. How much money do the “rich” need anyway? If the “middle” class sees a few more dollars in their pay checks, what will they do? Buy things they have been putting off to buy. Thus increasing the profit of those “rich” people buying their products now. So, everyone wins. A no brainer.

The obsession with 2005…Oh, wait, that is because when these deregulations were passed along, McCain was a senator and Obama was not.

Let’s see…Keating 5…

Let us not forget McCain’s former economic adviser is ex-Texas Sen. Phil Gramm. On Dec. 15, 2000, hours before Congress was to leave for Christmas recess, Gramm had a 262-page amendment slipped into the appropriations bill. It forbade federal agencies to regulate the financial derivatives that greased the skids for passing along risky mortgage-backed securities to investors.

And that, my friends, is why everything’s falling apart. That is why the taxpayers are now on the hook for the follies of Fannie Mae, Freddie Mac, Bear Stearns and now the insurance giant AIG to the tune of $85 billion.

(2) it proposed to amend the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to establish:

(1) in lieu of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development (HUD), an independent Federal Housing Enterprise Regulatory Agency which shall have authority over the Federal Home Loan Bank Finance Corporation, the Federal Home Loan Banks, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac);”

In other words, it proposed to transfer any remaining oversight from the government to an independent agency.

So, where/how, exactly, would there have been oversight, according to McCain if it was transferred to an independet agency w/o Congressional oversight?

My husband and I are what are sarcastically referred to as `compassionate republicans’. We own a small business (approximately 14 employees) that employs blue collar workers. We pay top dollar in our city to employ the best workers, provide them with paid medical and dental insurance, as well as contributing yearly to their simple IRA’s, regardless of whether or not they contribute. We give to charities to help the poor. We support organizations that help the sick. When we have a good year, we give extra into the community.When the economy goes down, we take a cut in salary, but still try to maintain our giving levels. My husband typically works 55 to 60 per week. If Obamo takes over, we will probably have to cut out all benefits and if taxes get too high, we will probably cut down on hours worked. Why should we work that much when it would be for the government. I always felt we were patriotic, but that doesn’t mean living a life working an unfair amount when we won’t be able to keep it!

John Spiller – Your lack of understanding of rudimentary economics is staggering. Everyone knows that when you lower taxes, you increase revenues. This has been proven again and again and again. Obama even acknowledges this. Obama (and those on the left) couldn’t care less about revenue available to them, they care about social engineering and campaign contributions and getting reelected. They pursue their goals through a carefully orchestrated series of steps, only one of which is the generation of class envy through the construct of “let’s tax the rich” and “it’s us versus them”. This crud is straight out of the communist’s handbook and anyone with a high school level of education should be able to see that.

I find it real interesting how the author of this piece likes to speculate about how Obama will pay for his new agenda, but doesn’t bother looking at the actual plan. Additionally, where does the $220 Billion dollar figure coming from? From everything I’ve read, it comes to about $130 Billion.

http://www.washingtonmonthly.com/archives/individual/2008_07/014046.php
“Obama is proposing $130 billion in new spending if every single one of his priorities is signed into law, and probably two-thirds of that is credibly accounted for by rolling back some of the Bush tax cuts, withdrawing from Iraq, auctioning emission credits, and a few other things. So even in the unlikely event that Obama gets every single thing he wants, he’d only be adding a net of $30-40 billion to the federal budget.”

I would like to remind everyone that “rich” defined as the top 1% of income earners pays 40% of all taxes. The top 10% accounts for 70% of the tax take. The bottom half of the income distribution pays little or no income taxes. How much more progressive would you like the tax system to be? Do you think that shifting the entire tax burden to the top 1-10% will result in an economic boom? Republican tax cuts, which I have always supported, have had one serious flaw. They have taken so many people off the tax roles that we have created a majority of citizens who demand more benefits without having to pay for them. This is not healthy for a Republc.

Is not Obama the benefactor of the most campaign contributions from Wall Street in the history of the Senate, really the second. McCain and Biden have been in the senate half of Obama life but conbined they have less contributions from Wall Street. Obama is only going to hurt the small business man but the way how much income of the Obamas will be taxed by his own law. Nothing because he will put his away and avoid being a patriot. Obama is doing everything in his power to avoid being a patriot. He is pro babydeath by reason of neglect of parental duties ABORTION. It is not prochoice it is pro death of babies.

Will the rich pass on higher incomes to the middle class in the form of higher salaries? Of course they will, if productivity justifies it. The thing about productive workers is, everybody wants them, so you have to pay more to keep them around or they’ll leave for someone who will pay them what they’re worth.

First a company gets started. It buys equipment, leases space, gets a shop running. etc. One of three things happen:
1: it’s investment is met with success. The Business grows.
2: it’s investment is met with returns, but not as much as hoped for: the business remains in business.
3: it’s investment doesn’t pan out: the business loses money.

3 can happen without the business going under, but not always. In a free market, if 3 happens too often, the business goes bankrupt. That’s not a problem really. One of the key pillars of capitalism is the freedom to fail.

So we have a large business, who HAS done well in the past, hires a lot of workers and gets a lot done and it starts making piss poor decisions. The laws of economics decree: that business’s days are numbered. Doesn’t matter how big or small. So it starts going belly up, but instead of going under, it get’s a fat check from Uncle Sam. Why? Cause the CEO’s are in bed with a few senators in a committee overseeing their actions. Who pays for it? Not the CEO’s who made the piss poor decisions to begin with. Not the Stock holders, who probably got off the sinking ship when they had a chance and cut their losses. Not the Senators, who should be hung for treason. None of the above. It’s the taxpayer who usually is struggling to work a job, raise a family, pay a mortgage, and put food on the table.

If we’d let it go bankrupt, the system might suffer a bit, but the market has a way of correcting itself. Now I’m sure that I, the company I’m working for, the supermarket I shop at, the gas station I go to, the mortgage company (that hasn’t gone belly up) I pay, the dentist, the doctor, the nurses, any everyone I get money from or send money to are paying more taxes as well.

The patriotic thing to do would be to string a few senators up and tell the home states to screw themselves.

“… Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.”

The top 5% whom Obama wants to heavily tax are mostly small business owners, who hire workers and are trying to grow, meaning hiring more workers. It’s the small business owners and people looking for work whom Obama will hurt with his tax increases.

What people don’t understand is why some of us are so against the current Republican ticket, but we have an obligation to fight against history ever being repeated again. Many of us out here are not fighting for the Democratic campaign but are fighting against an ideology.

1) An ideology that completely mirrors the ideology of this past 8 years.
2) An ideology that recognizes the few while completely disregarding the masses.
3) An ideology that believes in taking military action against Iraq, an incident that is completely unrelated to 9/11, without solidifying our claims beforehand. In the present, we have found no evidence of weapons of mass destructions or a tie to Osama Bin Laden. The devastation of this war has cost us over 4,000 of our brave troops and counting, over 1/2 trillion dollars of taxpayer’s money and counting, and over 1 million Iraqi lives unrelated to the terrorists or insurgency.

4) An ideology that still believes that the Iraq War is the right war on terrorism when the Afghanistan War should had been the right war on terrorism, where Osama Bin Laden actually was until he slipped into the mountains and into Pakistan’s territory now. The Iraq War also diverted our attention away from the Afghanistan War. We now have extended our resources in two separate places and have heightened our risk to our troops, our expenses, and creating another dilemma that will take quite some time to finalize. The Iraq War will not go away overnight and it is now our obligation to see it all the way through for God knows how many more years. This has also been the most unpopular war in the eyes of the world’s communities.
5) An ideology that believes that we are at our safest state since 9/11, when a recent terrorist plot was still trying to enter Great Britain’s airports with liquid explosives heading directly to us, but thankfully the plot was foiled. While in Afghanistan, the terrorists are regrouping and strengthening and we have recently suffered another high casualty to our troops yet again within this past month. We currently have the least amount of alliances in the world’s communities due to this unpopular Iraq War. True national securities are the ties that bind us to our world’s communities and the ties that bind them to us.
6) An ideology that vetted one of the most inexperience VP ticket in history, from foreign policies to national defense. If God forbids that anything happens to this President if elected and is stricken with illness, this VP will be running the country.
7) An ideology that believes in “the fundamentals of our economy are strong” while we are facing the highest mortgage foreclosure crisis, high unemployment rate, and the largest collapse of our financial infrastructures since The Great Depression of 1929.

This is an ideology that a lot of us in America are against. Whether this ideology is in the Republican or Democratic ticket is not the main issue but the fact is that America does not want to fall into another 4 more years of devastation. We cannot afford this anymore.

Jeff, “An ideology that recognizes the few while completely disregarding the masses”??? Are you saying the masses are liberal and relate to elitism?? The masses are moderate to conservative. Are you saying the masses agree with someone who takes 20 years to denounce his outspoken racist, America-hating pastor when he has been attending that pastor’s church and listening to the man rant and rave for 20 yrs??? The masses were offended by Obama taking racism and hate-mongering bigotry lightly, knowing that it meant him having to denounce someone he needed to gain community acceptability. Are you saying that the masses support tax increases? The masses know the economy needs growth and stability, which comes down to tax cuts and less spending so that businesses will continue to thrive and hire and fuel economic prosperity for the masses. Massive spending for massive entitlement for massive welfare programs equals Barak Obama. He will be disastrous for the US and world economy.
Less spending is McCain’s middle name, and he’s been in the forefront on that (even to the ire of his own party) for years.

“In the present, we have found no evidence of weapons of mass destructions”: Saddam Hussein killed thousands of his own people in the ’90s by gassing them — the use of widespread biological and chemical gases against helpless innocents is a weapon of mass destruction.

A stable, prosperous and US-friendly Iraq right in the center of the most volatile region in the world, will change the global, geo-political-economic landscape and will prove to be the landmark decision that will vindicate Bush-Blair. With Russia and Venezuela now becoming cozy partners and using their oil and natural gas to take nation customers hostage (including most of Europe and nearby South America) and also shoring up their militaries, plus China’s growing ambitions in chaotic, cash-strapped Africa, we need someone in the White House who will stand up to these world bullies – who isn’t afraid to send someone to the anti-Iran protest event for fear of hurting the Iranian president’s feelings – someone who understands appeasement will not work with experienced authoritarians and dictators — someone who can make a decision, rather than wait to see what the polls say or what his party says. The masses know the right man for the job is John McCain.

The primary definition is:
(noun)
a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc.

Another definition is:
(verb used with an object)
to lay a burden on; make serious demands on: to tax one’s resources.

Which definition do you think is not consistent with the government powers of taxation, and which do you believe is the correct definition for taxation with representation?

Obama’s plan to do a “transfer of wealth” by means of taxation is not consistent with the defined purpose of government taxation with representation. It is merely a taking of the resources of some and giving it to others.

This is in fact what communist governments do. They take from all that is productive and distribute to all in what would appear to be equal portions — but in fact is not.

Obama’s taxation plan, referred to by Senator Joe Biden as American’s patriotic duty, is socialistic and is nothing more than taxation without representation, for without a say in how the recipients expend the redistributed monies — those being “taxed” according to Obama’s communist agenda are enslaved to the government.

Is taxation slavery what Obama has in mind? Radical despots taking by force of government that to which they are not rightly entitled?

Note that in the first definition above, governments usually take in reasonable taxes to provide specific facilities or services — that’s in a democratic society, of course.

Besides, if in fact it is patriotic, as Mr. Biden has suggested, to pay more than a reasonable amount in taxes — how much more has either Obama or Biden paid in excess due to their overwhelming patriotism?

I second that and wish to add that Jeff’s lack of understanding of basic military principals exceeds that of John’s of economics.
Afghanistan is in the middle of nowhere and we have about as many troops there as we can support, logistically.
While some wars are not very logistic intensive ( insurgencies and revolutionary wars mostly), Afghanistan, because it is land locked and mostly high desert and mountains, is a logistic nightmare. Pakistan, which is an enemy pretending to be an ally, has a death grip on our supply line. They can cut it when ever they want, which means most of the troops there would be toast. We are about on the limit for how many we could support by air in an emergency.
SO Afghanistan is going to take longer and cost more in blood and money then Iraq.
We will gain very little by driving the Islamists out of Afghanistan. Dirt and mountains. Got lots of that already. The terrs will just set up shop somewhere else. Afghanistan is a job for Special Forces and the Air Force. Putting the Army in was STOOOPID!
Iraq, on the other hand is an important campaign in the WoT. The biggest reason why there has been no major attack on America since 9-11 is because of Iraq. If some jihadist wants to kill Americans, he can go to Iraq to try his luck. A BUNCH did and died there.
The center of gravity ( a military term meaning the thing or place that is the most important to your enemy) in the WoT is Iran. You CAN invade Iran from Iraq. You cannot invade Iran from Afghanistan. So long as the Mad Dog Mullahs control Iran, Terrorism will be alive and well.
Soon they will have nukes, at which point all the lefties that don’t want to do regime change in Iran will regret their choice.
Jeff, you need to get a copy of Dunnigan’s “How to make War”. It is an anti-war book, so you will like it. More importantly it has the tables you need to figure out how many metric tons per day an Army needs.

Three choices in the War on Terror.
1.) Surrender and become good little Muslims.
2.) Nuke ‘em.
3.) Fight it out toe to toe and beat ‘em.

If you pick 3, then Iraq is critical. Iraq is where the tools and tactics to go toe to toe with them were developed.
Regardless of how Iraq ends ( I think the idea of Iraq becoming a democracy is delusional) The things the Army learned there will be essential to winning the WoT.
Unless you can talk a billion Muslims into giving up their religion, we will have to fight them. Choice 1 AND 2 mean the end of Western Civilization.

Ex-fetus, not all Muslims are fanatical or bent on berating or destroying the West. I lived in the Gulf for 5 years and have many Muslim friends there who are pro-American and have pro-Western ideals, including a yearning for true democracy. There are also many moderate Muslims abroad and in the US who do not agree with the radical Islamic worldview.

Hey, Patrick, watch what you’re saying about Bigfoot. It calls the veracity of your entire piece into question, especially for the citizens of the great state of Ohio, your home state. They spot them all the time.

Moreover, after all the homines sapientes* leave the area for lack of employment, Governor Strickland, and the rest of the Dems, will have to rely on the Bigfoot vote for re-election. I’ve even heard that ACORN has already begun a Get-Out-the-Bigfoot Vote effort, and has been registering them left and, er, left.

(FYI, homines sapientes is plural for homo sapiens, which I did not know until I googled it. Yeesh, I’ve forgotten so much of my high school Latin. At least I still know what semper ubi sub ubi means.)

Ex-fetus, not all Muslims are fanatical or bent on berating or destroying the West. I lived in the Gulf for 5 years and have many Muslim friends there who are pro-American and have pro-Western ideals, including a yearning for true democracy. There are also many moderate Muslims abroad and in the US who do not agree with the radical Islamic worldview.

Not “every” Muslim needs to believe in destroying the West for it to happen. Hell, even the moonbats who believe the “Bush junta” runs American and Western policy can’t possibly believe that “every” American and/or Westerner believes in Bush’s policies, yet somehow Bush and his “cabal” are able to steer policy in their direction, so why wouldn’t a small proportion of Muslims who DO believe in “destroying the West” be capable of pushing Muslim “civilization” in that direction? Have the Muslim masses ever been empowered enough to take on a determined Muslim leadership to stop it from making aggressive war? I’ve studied Islamic history enough to know the answer is no, so if people are relying on their Muslim “friends” to stop the Muslims who want to destroy the West, they are basing that hope on exactly squat, to use the technical term. If people cannot understand that, they really shouldn’t be commenting on the War on Terror (which should definitely be called the War on Islamic Fascism and, yes, I’ve heard all the counterarguments to that phrase and they are all weak).

Oh, and the article is correct about Obama’s plans. I am “rich” by Obama’s stupid definition and I will definitely find ways to decrease my current income to pay less taxes. Screw him and his socialistic policies. I don’t owe the government a damn thing and I certainly don’t have any sense of obligation to the losers who will benefit from Obama’s largesse with my money.

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

”There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,” Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.

Mr. Snow said that Congress should eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies.

The administration’s proposal, which was endorsed in large part today by Fannie Mae and Freddie Mac, would not repeal the significant government subsidies granted to the two companies. And it does not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enables them to issue debt at significantly lower rates than their competitors. Nor would it remove the companies’ exemptions from taxes and antifraud provisions of federal securities laws.

The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session.

After the hearing, Representative Michael G. Oxley, chairman of the Financial Services Committee, and Senator Richard Shelby, chairman of the Senate Banking Committee, announced their intention to draft legislation based on the administration’s proposal. Industry executives said Congress could complete action on legislation before leaving for recess in the fall.

”The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,” Mr. Oxley said at the hearing. ”We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,” the independent agency that now regulates the companies.

”These irregularities, which have been going on for several years, should have been detected earlier by the regulator,” he added.

The Office of Federal Housing Enterprise Oversight, which is part of the Department of Housing and Urban Development, was created by Congress in 1992 after the bailout of the savings and loan industry and concerns about regulation of Fannie Mae and Freddie Mac, which buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.

At the time, the companies and their allies beat back efforts for tougher oversight by the Treasury Department, the Federal Deposit Insurance Corporation or the Federal Reserve. Supporters of the companies said efforts to regulate the lenders tightly under those agencies might diminish their ability to finance loans for lower-income families. This year, however, the chances of passing legislation to tighten the oversight are better than in the past.

Reflecting the changing political climate, both Fannie Mae and its leading rivals applauded the administration’s package. The support from Fannie Mae came after a round of discussions between it and the administration and assurances from the Treasury that it would not seek to change the company’s mission.

After those assurances, Franklin D. Raines, Fannie Mae’s chief executive, endorsed the shift of regulatory oversight to the Treasury Department, as well as other elements of the plan.

”We welcome the administration’s approach outlined today,” Mr. Raines said. The company opposes some smaller elements of the package, like one that eliminates the authority of the president to appoint 5 of the company’s 18 board members.

Company executives said that the company preferred having the president select some directors. The company is also likely to lobby against the efforts that give regulators too much authority to approve its products.

Freddie Mac, whose accounting is under investigation by the Securities and Exchange Commission and a United States attorney in Virginia, issued a statement calling the administration plan a ”responsible proposal.”

The stocks of Freddie Mac and Fannie Mae fell while the prices of their bonds generally rose. Shares of Freddie Mac fell $2.04, or 3.7 percent, to $53.40, while Fannie Mae was down $1.62, or 2.4 percent, to $66.74. The price of a Fannie Mae bond due in March 2013 rose to 97.337 from 96.525.Its yield fell to 4.726 percent from 4.835 percent on Tuesday.

Fannie Mae, which was previously known as the Federal National Mortgage Association, and Freddie Mac, which was the Federal Home Loan Mortgage Corporation, have been criticized by rivals for exerting too much influence over their regulators.

”The regulator has not only been outmanned, it has been outlobbied,” said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ”Being underfunded does not explain how a glowing report of Freddie’s operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.”

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.
—

Ed, you should have done a bit more research into the linked article as it is not represented in its entirety and fails to disclose that the legislation was supported by Freddie and Fannie.

I keep meeting these dumb*** kids who are all agog about Obama and I try to reason with them (I majored in economics in college and have an M.B.A. in Finance)that their lives will be considerably worse off under the Euro-socialist economic “ideas” of Obama and his party. Most of these kids never studied economics or history in any classical sense, so they truly do not know any better. They have been indoctrinated rather than educated by their teachers and professors. It’s scary and it’s tragic. Converts to rationality and responsibility are few and far between.

As an investment professional I can attest to the veracity of what Mr. Poole has written here. Doubling the capital gains tax is incredibly foolish, since most Americans who have retirement funds are exposed to the negative effects of this idiocy. Young people will find fewer jobs and economic stagnation awaiting them after graduation. I remember what the 1970′s were like. I was a teenager and young adult during that time. Jobs were hard to find, and unemployment was higher than it is today. Inflation (take a look at Obama’s energy proposals and think of how higher energy costs will harm the economy further)was trending higher, eventually forcing the Fed to put on the brakes real hard. It was not a fun time to be young and trying to get started.

However, I fear that the only way to get socialism out of our system here in the U.S. is to endure its painful consequences again and learn the lesson we learned thirty years ago (I am a former Leftist who left the Left in 1987). Most of Obama’s support is from the under-40 crowd, the education unions, and the last-hurrah Older Boomer Cohort (I’m one of the Younger Boomers). And it is primarily female. Well, ladies, how are you going to be able to hitch up with young guys and start families if yours and your men’s economic prospects are considerably more dim than they now are?

In early June 2008, Americans learned of a VIP loan program provided to influential politicians by Countrywide Mortgage at the direction of its chairman Angelo Mozilo – and that one of the so-called ‘Friends of Angelo” was none other than Jim Johnson, a former CEO at Fannie Mae who had just been tapped to head Barack Obama’s vice presidential vetting committee.

Countrywide Friends Got Good Loans

Countrywide Financial Corp. makes mortgage loans through a vast network of offices, brokers and call centers. But a few customers have gotten their loans a special way: through Countrywide Chief Executive Angelo Mozilo.

These borrowers, known internally as “friends of Angelo” or FoA, include two former CEOs of Fannie Mae, the biggest buyer of Countrywide’s mortgages, say people familiar with the matter.

One was James Johnson, a longtime Democratic Party power and an adviser to Sen. Barack Obama’s campaign, who this past week was named to a panel that is vetting running-mate possibilities for the presumed nominee. Another was Franklin Raines, a onetime Clinton administration budget director, who left Fannie Mae amid an accounting scandal in 2004.

Initially, Obama did what he did best, namely, obfuscate: Obama Defends Jim Johnson’s Role as VP Selecter

At a press conference today, Sen. Barack Obama said he will not ask Jim Johnson to step down from his VP selection committee despite his ties to Countrywide Mortgage. Obama said he will not vet the vetters.

Obama: “These are not folks who are working for me.”

But that only lasted one day: JIM JOHNSON STEPS DOWN

Jim Johnson, who had been leading Barack Obama’s vice presidential search committee, has stepped down from the campaign.

“Jim did not want to distract in any way from the very important task of gathering information about my vice presidential nominee, so he has made a decision to step aside that I accept,” Obama said in a statement. “We have a very good selection process underway, and I am confident that it will produce a number of highly qualified candidates for me to choose from in the weeks ahead. I remain grateful to Jim for his service and his efforts in this process.”

Under the bus you go, Jim. Say hi to Reverend Wright for us.

So apparently Jim Johnson’s sweetheart Countrywide mortgages were grounds to disqualify him from vetting Obama’s veep candidates. But receiving similar favorable Countrywide mortgages were not sufficient from preventing another Friend of Angelo from drafting legislation that stood to benefit the new owner of Countrywide, Bank of America, at the expense of the American taxpayer. Namely, one Senator Chris Dodd, D-CT. Chair of the Senate Banking Committee. And at the time, busy crafting bailout legislation for the mortgage industry – legislation of considerable interest to Bank of America.

The story was initially broken by Conde-Nast Portfolio (link only) and picked up by other media outlets as well.

Two Senators Appear to be “Friends of Countrywide”

The Senator, a Democrat from Connecticut and Chairman of the Senate Banking Committee which regulates mortgage lending, was named in an article by Julie Hirschfeld Davis of the Associated Press and earlier by Conde Nast Portfolio magazine, as one of two senators – the other being Senator Kent Conrad (D – ND) – as having received preferential treatment from Countrywide CEO Angelo Mozilo in obtaining mortgage loans. Dodd had earlier this year called Countrywide’s lending practices “abusive.”

So, what was Dodd’s reaction to this revelation of preferential treatment? Why, to pull out the Dem scandal management playbook. First, he denied that he got preferential treatment. When it was revealed that he knew he was getting a special deal, he claimed he thought it was for his being a longtime customer. When a former Countrywide loan officer said that Mozilo demanded of his employees that they inform the recipients of VIP loans of their special treatment, and that Dodd had received FOUR sweetheart mortgages instead of just the two initially reported by Conde Nast (saving him a total of $70,000), Dodd just simply clammed up and stonewalled.

Some called on Dodd to halt his work on crafting the mortgage bailout bill, given the allegations. But Dodd refused. After all, there was vital legislation to draft for his new patron, Bank of America.:

WASHINGTON (Map, News) – “We call it the ‘Bank of America bill on steroids.’” A House staffer told me that, demanding anonymity, but speaking on behalf of aides to GOP members of the House Financial Services Committee.

He was talking about the bill whose Senate version has been brought to the floor this week by Sen. Chris Dodd, D-CN, and Sen. Richard Shelby, R-AL. Dodd-Shelby would let mortgage lenders off the hook for bad loans, shifting the burden ultimately to taxpayers. Dodd has received approximately $70,000 in campaign contributions from Bank of America in the last year-and-a-half.

Dodd-Shelby hit the Senate floor this week amid controversy over sweetheart loan deals Dodd and other powerful politicians received from Countrywide Financial, the lender with the most exposure to subprime mortgages at risk of default.

Some journalists and Republican lawmakers are asking if Countrywide bought a bailout bill with its VIP loans to Dodd, who is chairman of the Senate Banking Committee

And it appeared that Bank of America was pleased with what their money bought:

National Review Online has obtained an internal Bank of America “discussion document” (pdf here) on the subject of the FHA Housing Stabilization and Homeownership Retention Act of 2008, a.k.a. the Dodd-Shelby mortgage-lender bailout bill.

Yesterday, Tim Carney reported that the prevailing sentiment on Capitol Hill is that the Dodd-Shelby bill “is exactly what Bank of America and Countrywide wanted.” BofA is in the process of acquiring Countrywide. Countrywide is currently embroiled in a scandal over its V.I.P. program, under which several powerful politicians, including Sen. Chris Dodd, got preferential loan rates.

This discussion document (dated March 11, 2008) would appear to support the contention that BofA essentially wrote the bailout section of the bill. Almost all of BofA’s preferences are mirrored in the Dodd-Shelby legislation. The BofA document even offers PR tips, such as “We believe that any intervention by the federal government will be acceptable only if it is not perceived as a bail-out of the bond market.”

And the estimated cost to taxpayers for that bailout of BofA and other mortgage lenders? Estimates range from $300 to $500 billion. So for $70,000 in campaign cash and $70,000 in mortgage discounts … well, you do your own math as to what that costs each taxpayer.

And the sorriest part of this affair? After all these revelations, Dodd was still on Obama’s short list of veep candidates. Which goes to show just what Obama thinks of the Politics of Personal Enrichment – that it is business as usual for the Democratic Party. Change? Try chump change. As in, Obama and Dodd thinks we are the chumps because they stick us with the costs. There’s only one way to prove them wrong. Make their corruption cost them their jobs.

Inside Obama’s ACORN by Stanley Kurtz (at National Review, I think). Very informative.

BO’s ties to this organization are more far-reaching than he would have us believe, and we get a look into this network of radicals. Like Alinsky, they employ intimidation, and this tactic: “in your face” — (sound familiar? BO’s supporters are now asked to do this to those who write/speak critically of him). Necessary now that his numbers are falling.

The treatment of Freddoso surely was intimidation – threat/attempt to sue him over his revelatory book. Disrupting his radio interviews. No way does BO want the broader public to know about his history of attachment to radicals.

To be fair, the gentle, peace-loving savior favors first political insider strategy. His ugly side isn’t so obvious. But if faced with losing, has no problem resorting to hardball intimidation. The man’s going to get his way. Just ask Hillary. Or Alice (Baker?). Or Jim (Ryan?). Political opponents all.

BO specifically worked on legislation on these ACORN pet issues: living wages and banking practices/bankruptcy. I perked up when I saw “living wages” since my son – college student – showed me this assigned book “Nickel and Dimed.” A NYT bestseller(natch) says on its jacket, “has fueled nationwide campaigns for a living wage.” With Ayers hard at work, the campaign is on in our schools.

BO isn’t new to politics and the perversion of same. ACORN had a bigger hand in his entry to political office than is known.

He goes back at least to 1992, as a lawyer – ACORN’s “Project VOTE” – and the Motor Voter case. ACORN is not nonpartisan, but rather intensely radical and partisan. I think some 37 employees in Wisconsin alone (Milwaukee?) were recently charged with fraudulent voter registration. They’re not even careful about info – or lack of – on the forms they submit. Perhaps because they’re paid for each card they turn in. And if memory serves, one organization on which BO&Ayers were board members shoveled money (meant for other uses) instead to grants ($70K) to ACORN.

He was no more blind to their fraud then – and now – than he was blind to Wright’s hateful sermons.

For decades these radicals have inserted themselves in our society – destroying it bit by bit. Their former stealth tactics are now seeing the light of day. We can’t let them point the finger of blame on others. We have to fight back and expose them for who they are. And Americans have to know who BO is.

They wanna blame Republicans for the economic mess? They didn’t regulate enough? Sounds to me like the Dems are saying, “You didn’t know how stupid we are. Or how corrupt. It’s your fault you didn’t protect everybody from our stupidity and corruption.”

Well, I’ve got an answer: kick as many Dems as you can out of Congress in November, and get McCain/Palin in the White House.

She’s got a shotgun and her aim is pretty good.

It’ll be cocked and ready to hit the back sides of any Democrat – or Republican – that tries to turn tail and run from any mess created by their corruption. She doesn’t play favorites.

“If the events of recent days prove anything, it is that we cannot believe a word that John McCain or Barack Obama has said about what he will do as president. It’s not that they have lied. Simply put, the underlying premise of everything the candidates have proposed — that the economy is fundamentally sound — is no longer operational.

The candidates know that the economy needs help. Obama in particular has made clear that he believes that average people are hurting and need additional government assistance. McCain has been less willing to say so lest it reflect badly on the policies of George W. Bush, whose party he represents.

Nevertheless, it is extremely unlikely that either man envisioned the magnitude of the economic problems that are becoming more obvious by the hour.

Now, federal officials are crafting an entity akin to the Resolution Trust Corporation to buy up bad debts and get them off bank balance sheets. That’s how the RTC cleaned up the savings and loan mess in the early 1990s — to the tune of about $125 billion. Today’s problems will cost a lot more.

What this means is that we cannot afford either candidate’s tax and spending plans. The money that Obama would like to spend on the poor will have to be used to clean up the financial mess. Similarly, the tax cuts that McCain would like to hand out are off the table. The federal government is going to need new revenue and fast. We cannot continue to cut taxes as if the budget deficit doesn’t matter. The fundamental problem of the U.S. economy is too much debt. Fixing that will require belt-tightening from everyone — including the federal government, which must get its fiscal house in order to help the financial sector heal.

Voters should insist that McCain and Obama throw out their tax and spending plans and offer something that reflects current economic realities. These new plans must be more than vague generalities and should commit the next president to a course of action that involves real spending cuts and real tax increases.

Of course, the idea of a candidate telling voters that they will suffer if he is elected runs counter to every political instinct. But it is not necessarily politically fatal. In 1992, Bill Clinton put forward a fairly detailed list of spending cuts and tax increases and was, nevertheless, elected.

The trick will be getting both Obama and McCain to put forward budget restructuring packages so one isn’t unfairly penalized for his honesty. People deserve to know whether the next president thinks we only need to raise taxes on the rich or only need to eliminate earmarks in the budget to solve our fiscal problems. This will tell them whether the next president is a serious person or intellectually dishonest about the nature of the nation’s fiscal problem.

It would be useful for both candidates to work from the same benchmark, such as reducing the projected deficit by $1 trillion over 10 years. That would pretty much eliminate the use of “smoke and mirrors” and unserious proposals. If one candidate wants to raise taxes by, say, $1 trillion, then he should say so and spell out how. If he thinks we can get $1 trillion out of the income tax without burdening middle- and lower-income workers, let’s hear how. If he thinks we can cut spending by that much, he should explain how. If he thinks it can be done without significantly cutting popular programs such as Medicare, I for one would like to know how. Perhaps a consortium of think tanks would agree to jointly score the plans for honesty and accuracy.

Realistically, a deficit reduction package of the magnitude that I suggest would require a variety of tax increases and spending cuts, including cuts in entitlements and appropriated funds. It’s probably realistic to assume that the balance would be roughly 50-50 between taxes and spending, though each candidate could offer a different balance. But if the proposed package is so one-sided as to make enactment by Congress impossible, this is also useful information for voters.

The time for free lunches is past. We must get McCain and Obama to put forward new economic plans. The people deserve to know what is really going to happen in January, and our next president should know whether voters support his vision. With an electoral mandate, quick action in Congress may be possible. And right now we need quick and decisive action if we are to right the economy.”

The writer was deputy assistant Treasury secretary for economic policy from 1988 to 1993. Before that, he was a senior policy analyst in the White House Office of Policy Development and worked as an economist on Capitol Hill.

Now, if I follow it, the sneaky Dems at Fannie/Freddie were handing out loans to the poorer among us. What sounded like a lovely idea (I rather liked it at the time) — didn’t factor in that the Dems would be at the helm. Yeah.

They were allowing folks to borrow money without ANY money down.(!!) And with little, if any, reassurance of secure employment on the part of the borrower.(!!) Insanity in the real world. But it makes sense if…well…if you’re a Dem. Because maybe there was a grander plan…

BO is talking on the stump today. Listen carefully to what he’s saying:
“We have to make sure these people don’t lose their homes.” Now how are they going to do that?

And did you see this? The other day a bunch of poor folks holding signs – protesting – getting all upset about losing their houses and getting ripped off. Gosh, it looked and sounded strangely familiar…like they’d been coached by some Alinsky ‘community organizers’ to me…

I thought I heard murmurings some time ago about reducing the amount these folks will have to pay on their homes in order for them to afford the mortgages. So will this mean we’ll be essentially giving, say, a $100K house to someone for maybe half its value? Wow. Not bad if you can get away with it. Would that mean that that Dem congresswoman who didn’t have one mortgage, but THREE, was worried about losing one of her houses; and correct me if I’m wrong, but was she using campaign money to pay off some mortages?

Back to BO on the stump. In the same breath, I heard BO moving on to his next project: college loans. This bailout has to move from WallStreet to Main Street, is what he’s saying. Yeah, somehow, I’m sure he and his pals will figure a way to have the taxpayer pay for the advanced educations of those he cares most about. But, you know what, I think this is where I’d like to draw the line.

I don’t even like the hard-earned money my kids’ dad has forked over to the liberal, creepy institutions of higher education they’ve attended. My kids have heard me tell them more than once: can you read? Can you think? Well, pick up a book and take care of your own education. They know I’ve about had it with these overrated halls of ivy.

Nope. I’m not too keen on my money paying for an Ayers-inspired education with the likes of Ward Churchill in the classroom. There’s no telling how mushy the mind might be that’ll receive it. And I won’t be around to tell them it’s a load.

Hey, tomw, did you factor in the so-called tax breaks? 40% of the people now pay no taxes, but they will get a tax break anyway, in the form of cash of $500-$1000. Others will be brought down to the level of paying no taxes. How much will that cost?

Personally, I find it unacceptable that middle-middle-class and lower-middle-class pay hardly any taxes. They’re middle class dammit, not poor. They should be called upon to help fund our military, CIA, FBI, etc…. Prior to the Bush tax cut, they paid 1/6 of the federal tax burden. When that tax cut expires in 2010, it will go back to the way it should be.

I’m tired of hearing middle class people complain about how hard it is, while they spend $200/mo on cellphone bills. Every Middle-schooler gets braces to fix their teeth. Wow! When I was a kid, kids didn’t want braces, because they got teased. They don’t have 3-5 kids each like when I was a kid. Two or three TV’s per house. Two or three cars. Kids have their own rooms. Electronic gadgets abound. I guess they learned the rule growing up: well-to-do people learn how to poor-mouth.

You are so far ahead of me! I just realized that Obama was practicing “trickle up” economics, so googled the term and found your article. I also feel O’s policies may actually represent Reparations if you start to look at who is really benefitting from the money being doled out. The whole medical bill, the “cash for caulkers” plan, and the oppressive new burdens on small businesses will have the net effect of “leveling the playing field” through wealth distribution. Hmmmmm…